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Budget to Manage Your Income and Expenditures

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A common approach to achieving the best use of cash involves picking the “low hanging fruit” by identifying and attacking your top five or so expenditures. This is usually done by looking at your spending patterns over time, and identifying recurring patterns and amounts that can be predicted and managed. Your adviser can provide you with help and tools to create a budget to do this.

The devil is in the detail

You may think you already know where most of your money is coming from and going and what the big chunks are. Salary and interest. Mortgage, school fees, car loan, investments, taxes. “OK, let’s move on”, you say. But before you do, consider that this knowledge isn’t enough to be meaningful. You need to know what elements are controllable and what aren’t, and what changes can be made to income and payments of these amounts to smooth out the peaks and troughs. It might also surprise you that one of your “big five” controllable expenses may actually be coming out of your ATM card, or from your teenage daughter’s mobile phone bill.

To develop a strategy to make the best use of your cash, you’ll need a budget. Creating and referring to a budget is the only way you will know what you are spending your cash on and what can be controlled. To create a meaningful budget, you’ll need to:

  1. Commit to the process;
  2. Establish a savings goal;
  3. Look at your income and spending history;
  4. Consider how that history helps or hinders the goals you’ve set earlier and develop strategies to correct bad habits;
  5. Consider new events that will affect your income and expenditure in the coming year;
  6. Set financial targets for key controllable elements based upon your strategies and new events; and
  7. Monitor your actual experience against your budget to identify and correct shortfalls to reach your goal.

Commit to the process

Creating a budget enables you to identify where all your money comes from and where it goes over a year, and is the only way for you to gain control over your cash. To create a budget, you’ll first need to realise the importance of doing so and commit to the process. There’s no point going through the exercise if your figures are based on wild guesses or wishful thinking. Remember the old axiom, “garbage in – garbage out”.

Establish a savings goal

The corporate business planning process can be a good model for setting personal goals. The comparison comes in handy concerning the budgeting process. When a company sets out to create its budget, the Chairman and Chief Executive will agree and set a profit target for the year, against which the budget will be built. In the same way, you should set your after tax savings goal for the year, for example at “10% of income”.

You might think that this target is easily achievable – but, do you really know that you are saving money at all? Later activities in the following chapter will help you to determine this. For the moment, and until you become more familiar with your budget, 10% of savings is probably a good rule of thumb.

Look at your income and spending history

Unfortunately, there’s no better way to identify your income and spending patterns than to simply keep a record of where all your cash comes from and goes over a period of at least three months. If you aren’t analysing your expenses over a full year, you’ll also need to consider other large one-off expenses that occur, such as rates or school fees. Once again, your adviser can provide you with a diary tool to collect information about your income and outgoings over your nominated period.

Next, consider what the resulting annual amount for each item is likely to be if you didn’t make any changes. This will be the basis for creating your budget.

Once you’ve identified all your income and expense categories and annual amounts, you’ll need to consider in which months these amounts occur. You’ll be doing this so that you can identify any peaks in expenditure and troughs in income that need to be managed. Again, your adviser can give you a worksheet for this purpose.

Put your history in context

If you’ve previously determined your goals in an earlier exercise, that is a logical place to start. Consider the financial impact of these goals over your budget period, and how your historical patterns impact negatively upon your goals. Work with your family to identify ways in which you can improve your historical income and spending patterns, and write the results in your budget worksheet.

Consider new events that impact your historical patterns

You may be expecting to change jobs in the coming year, or perhaps your daughter is moving out of the house. There may also be major capital expenses you are planning (such as a new car) that will impact your cash position. You’ll need to adjust your budget to account for things that will affect your historical patterns, and determine your expected cash flow for the year.

Set financial targets for the coming year

After all that hard work comes the fun part. You can play Treasurer and identify areas where spending cuts can be made, especially for major amounts that you can control. Do the same thing for income, assuming that you can make improvements there as well. At the end of this step, you’ll have completed your income and expense budget.

Monitor your activity

Anyone who has created a budget but has not compared actual activity against it over time has only done half the job. So far, you’ve identified and probably been surprised at your spending patterns, and have promised yourself to try to be good in the future. What you really need to do is to compare your actual activity against your budget on a regular basis and see what shortfalls arise, and then take steps to get yourself back on track.

As you’ve done during the budgeting process, you’ll also monitor your actuals to determine the best ways to smooth out the peaks and troughs in your monthly cash flow.

While your adviser can work with you to help you monitor progress and develop strategies in response, you might also consider:

  • Disciplining your ATM withdrawals used for cash purchases to less than 5% of your total expenditures;
  • Identifying and reducing your spending on luxuries (you’ll need to think twice about your definition here), especially if your history shows that you aren’t saving at least 10% of your after-tax income;
  • Renegotiating contracts and getting a better deal for such things as mortgages, car loans, mobile phones;
  • Working with your adviser to minimise your tax obligations; and
  • Not increasing your spending in anticipation of windfalls or salary increases – they may not happen.

Finally, a by-product of this monitoring activity will be an increasingly accurate source of data against which you can prepare your next budget, so you can complete the cycle again.

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Source by Paul Alexander Rochelli

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Where to Find Those Efficient and Hardworking Affiliates?

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Everyone wants a hardworking affiliate, employee, associate, partner, or even spouse, and why not? It’s the next best thing to doing the work yourself. However with the massive outbreak of work and income opportunities available online, how can you beat everyone else and find that one (or more) ideal person who will make your online business explode with success? Here are some of the most ingenious and uncommon ways to snag the idea affiliates for your affiliate program

Direct Sales Agents

Direct sales people are really one of the most enterprising, hard-working individuals in business. They mostly work on commissions or rebates and are willing to literally go door-to-door offering their products to anyone and everyone they bump into. Imagine how much easier their job would be if they could be an affiliate and simply work via the Internet and a mobile device or desktop.

Also, most direct sales people tend to carry more than one brand in their product arsenal so signing up as an affiliate would be almost the same type of work but using a different approach.

Colleges and Universities

Many college kids would be interested in a part-time income opportunity if it would mean funds to help pay for their education, loan, or partying. All you have to do is make sure to offer them products they can endorse as a student.

Freelancers

Did you know that the U.S. Census Bureau’s latest annual report show that 75% of U.S. businesses used freelancers in 2011? Freelancers earned a whopping US$990 billion in 2011 which is a 4.1% increase from the previous year. The only industries where the number of freelancers decreased were in insurance, finance, and construction. Most probably your affiliate program isn’t a part of these 3 industries.

Furthermore, online business and finance experts are predicting the growth to increase incrementally every year even with an economy that is improving. People just want income security and more control over their earnings. With the spate of lay-offs, it’s understandable why many would prefer to work as an affiliate than as an employee.

Scout For Them At Affiliate Conventions

There are annual affiliate conventions held in different cities around the country. You should try to catch one when it is held somewhere near your location. The average turn-out for these types of conventions has increased regularly over the years. Last year, many of them were sold out weeks before the event.

Advertise!

The US Census Bureau has said that as of 2012, 15% of Americans are poor, 43% of young adults depend on their parents to some extent for money. Even more surprising is that the median income of young adults in 1982 was $31,583 and last year it was $30,604 for the same age group! Income is dropping and people are looking for ways to earn additional income outside of their 9 to 5 jobs. That’s where you can come in playing the hero and helping others realize their dream income.

Finally, go online and talk about your product. Make the affiliate marketers come to you and have the luxury of picking the best candidates. You will need some help in marketing your affiliate program so target a marketer who’s experienced in affiliate program and SEO.

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Source by Lina Stakauskaite

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Recession Is Here… Six Costly Mistakes Home Sellers Make During Recessions And How To Avoid Them

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The U.S. is officially in a recession. What is a recession? A recession is a business cycle contraction or general economic decline due to significant drop in spending and other commercial activities. Most pundits and politicians will blame Covid-19 crisis for the recession, but even pre-Covid-19 the proverbial writing was on the wall.

The U.S. had over 120 months of economic growth, which was the longest expansion in the modern history. Other indicators, such as negative yield spread on treasuries (long term bonds having lower interest rates than short term T-notes), were pointing to an imminent change of the economic cycle and an impending recession. The only real question was: when and how bad?

Then Covid-19 came… If the cycle was going to change anyway, Covid-19 acted as a huge and unexpected accelerant to make the recession much more immediate and severe.

Inevitably during recessions all classes of real estate, including residential homes and condominiums, will be negatively impacted as lower consumer spending and higher unemployment rates affect real estate prices and marketing times.

Here are the six costly mistakes home and other real property sellers make during recessions and how to avoid them:

Mistake #1: This will pass and real estate market will be hot again soon

First thing to remember is that real estate cycles are much longer than general economic cycles. Even if the general economy recovers, which eventually it always does, a typical real estate cycle takes as long as 10 to 15 years. The cycle has four key stages: Top, Decline, Bottom and Rise.

Let us consider the last real estate cycle, which lasted approximately 14 years:

  • 2006 – Prices hit the Top
  • 2006 to 2012 – Prices Decline
  • 2012 – Prices hit the Bottom (Trough)
  • 2012 to 2019 – Prices Rise*
  • 2020 – Prices hit the Top
  • 2020 to? – Prices Decline

*NOTE: In 2016 the national residential real estate price index reached its pre-recession 2006 peak levels. It took 10 years for the real estate market to recover.

The way to avoid this mistake is to recognize that real estate cycles take years to run and plan accordingly. Additionally, nobody knows for sure when the prices will hit the top or bottom until after the fact.

Mistake #2: Low interest rates will make the economy and real estate market rebound

Between 2006 and 2011 the interest rates (Fed Funds) were continuously cut by the Federal Reserve Board and went from low 5% to almost 0%. However, that did not stop the real estate recession and depreciation of property values.

Undoubtedly, low interest rates made the economic decline and real estate recession less severe and saved some properties from foreclosures, but it still took six painful years for the real estate market to hit the bottom and then four more years for the prices to go back to their pre-recession levels.

Some markets had never fully recovered. For example, residential home prices in some parts of California, Arizona and Nevada are still below their 2006 highs.

To avoid this mistake, one needs to realize that although low interest rates help stimulate the economy and the real estate market, they do not cure them.

Mistake #3: I don’t need to sell now, so I don’t care

If you do not need to sell until the cycle plays out, which typically is over ten years, then you will not be as affected, especially if you have a strong equity position, limited mortgage debt, and solid liquid assets.

However, it is good to keep in mind that “life happens” and either professional or personal circumstances can change and we may need to sell property before the downturn runs its course.

Furthermore, if a property has a mortgages and its value declines to the point being “upside down,” meaning the mortgage loan balance exceeds the value of the property, then the options of selling, refinancing or even obtaining an equity line of credit, will be significantly limited.

This does not mean that everybody should be rushing into selling their real estate if there is no need to do so, just keep in mind that circumstances may and often do change and property options will be affected, so plan in advance. As one wise proverb says: “Dig your well before your thirst.”

Mistake #4: I’m selling, but I won’t sell below my “bottom line” price

This is a common and potentially very costly mistake. Generally speaking, every seller wants to sell for the highest price and every buyer wants to pay the lowest price. That’s nothing new. When selling real estate, most sellers want to achieve a certain price point and/or have a “bottom line.”

However, it is important to understand that the market does not care what the Seller, or his/her Agent, think the property value should be at. The market value is a price a willing and able buyer will pay, when a property is offered on an open market for a reasonable amount of time.

Overpricing property based on Seller’s subjective value or what is sometimes called an “aspirational price,” especially in a declining market, is a sure first step to losing money. When a property lingers on the market for an extended period of time, carrying costs will continue to accumulate and property value will depreciate in line with the market conditions.

Additionally, properties with prolonged marketing times tend to get “stale” and attract fewer buyers. The solution is to honestly assess your selling objectives, including the desired time-frame, evaluate your property’s attributes and physical condition, analyze comparable sales and market conditions, and then decide on market-based pricing and marketing strategies.

Mistake #5: I will list my property for sale only with Agent who promises the highest price

Real estate is a competitive business and real estate agents compete to list properties for sale which generate their sales commission incomes. It is not unusual that Seller will interview several agents before signing an exclusive listing agreement and go with the agent who agrees to list the property at the highest price, often regardless if such price is market-based.

Similarly to Mistake #4, this mistake can be very damaging to Sellers, as overpriced properties stay on the market for extended periods of time costing Sellers carrying expenses such as mortgage payments, property taxes, insurance, utilities and maintenance.

Furthermore, there is the “opportunity cost” since the equity is “frozen,” and it cannot be deployed elsewhere till the property is sold. However, the most expensive cost is the loss of property value while the real estate market deteriorates.

During the last recession, we have seen multiple cases where overpriced properties stayed on the market for years and ended up selling for 25% to 40% below their initial fair market values.

The solution is to make sure that your pricing strategy is based on the market, not empty promises or wishful thinking.

Mistake #6: I will list my property only with Agent who charges the lowest commission

Real estate commission rates are negotiable and not set by law. A commission usually represents the highest transactional expense in selling real properties and is typically split between Brokers and Agents who work on the transaction

Some real estate agents offer discounted commissions, in order to induce Sellers to list their properties with them. But does paying a discounted commission ensure savings for the Seller? Not necessarily.

For example, if the final sales price is 5% to 10% below property’s highest market value, which is not that unusual, due to inadequate marketing, bad pricing strategy, and/or poor negotiation skills, it will easily wipe out any commission savings and actually cost the Seller tens of thousands of dollars in lost revenues.

The solution is to engage an agent who is a “Trusted Advisor,” not just a “Salesperson.” A Trusted Advisor will take his/her time and effort to do the following: 1) Perform Needs Analysis: listen and understand your property needs and concerns; 2) Prepare Property Analysis: thoroughly evaluate your property and market conditions; 3) Execute Sales and Marketing Plan: prepare and implement custom sales and marketing plan for your property; and 4) Obtain Optimal Results: be your trusted advocate throughout the process and achieve the best possible outcome.

Finding such a real estate professional may not be always easy, but it certainly is worth the effort and will pay off at the end.

In conclusion, this article has outlined six costly mistakes real estate Sellers make during recessions and how to avoid them. The first mistake is not understanding that real estate cycles are long and take years. The second mistake is a misconception that low interest rates alone will create a recovery. Another mistake is not realizing that circumstances may change and not planning in advance. Mistakes number four, five and six pertain to understanding the market value, proper pricing and selecting the right real estate professional.

By understanding and avoiding these mistakes, real estate Sellers have significantly better chances of minimizing the negative impact of a recession while selling their properties.

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Source by Robert W. Dudek

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Useful Tips To Build The Best Gaming Computer

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Every gamer will want their computer to be the best gaming computer among their peers. Sometimes, with a little knowledge and tips and tricks, it is possible to build the best gaming computer and show it off to your peers. This article will show you how:

1) You can’t get the best gaming computer from computer retailers

If you want to get the best gaming computer, you have to build your own. Different gamers have different requirement for their gaming machine. Unless you are willing to pay a high price, you will not be able to buy a commercial computer that fulfills all your gaming needs. The only option you have is to build your own gaming computer.

2) You don’t have to be rich to build the best gaming computer

It is not necessary to burn a hole in your pocket to build the best gaming computer. With some due diligence, do some market research and compare prices around the marketplace. Merchant such as TigerDirect and NewEgg give regular discount to their products and you could save a lot of money if you catch them during their promotional period.

3) Most expensive parts do not have to be the best part

Sometime, the latest model or the most expensive model does not have to be the best part for your computer. It requires various components to work together to form the best computer system. When choosing a computer part, what matters is how well it can integrate with the rest of the components. Compatibility is more important than individual performance. What use is there if you spend lot of money on the latest quad-core processor and find that your motherboard doesn’t support it?

4) You don’t need to change the whole PC to own the best gaming computer

It is a misconception that you have to change the whole gaming machine to build the best gaming computer. If you already have a good barebone system, what you need to do is to upgrade the necessary parts and your gaming computer can roar back to life instantly.

5) Brand is important

Unless you want to see your computer system malfunction every few days, it is important that you purchase the parts from branded manufacturers with strict quality control. Motherboard brand such as Gigabyte, ABIT, ASUS are some quality brands that you can consider

If you follow diligently to the tips stated above. You will be on your way to build the best gaming computer. While price can be an issue, it is better not to scrimp on important computer parts such as motherboard, CPU, RAM and graphics card as it will cost you more to upgrade in the future.

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Source by Damien Oh

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